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Apple Inc. (NASDAQ:AAPL)’s decision to include a measly 16GB of storage for the lowest-tier iPhone 6 is estimated to net the company $3 billion more, Analyst Niel Cybart of Above Avalon estimates. The savings will be with Apple Inc. (NASDAQ:AAPL) for next year, Cybart says, after crunching numbers.

The key here is that the lowest-tier iPhone 6 has 16GB in storage while the next step in the lineup jumps to 64GB while the iPhone with the largest storage space is 128GB.

Apple Inc. (NASDAQ:AAPL) is expecting a lot more people to buy the 64GB version with the 16GB version as the lowest phone instead of a 32GB model. The 64GB version is about $100 more, Cybart notes.

Because of this, the analyst expects the 64GB model will be the version that sells the most in the current lineup. In the scenario, the 64GB version is the more value-for-money option.

As more people get accustomed to having 64GB in storage, they will more likely choose the same space for their iPhones in the next lineup Apple Inc. (NASDAQ:AAPL) unveils. This would be true even if the 16GB version is cancelled next year and 32GB becomes the entry-level iPhone.

Because of this shift to the mid-tier iPhone, Cybart says that the average selling price (ASP) will be buoyed. If Apple launched a 32GB version this year it could have also ran the risk of getting people off of the 64GB tier to the 32GB tier and see them stay there in the next upgrade cycle, thereby reducing ASP.

Couple this with the decreasing cost of storage and the analyst comes to the conclusion that the 16GB iPhone this year will net Apple $3 billion next year.

David Tepper’s Appaloosa Management Lp reported owning about 1.16 million Apple Inc. (NASDAQ:AAPL) shares by the end of the third quarter. This stake, then valued at about $116.94 million, is a 32% reduction in Appaloosa’s holding in the iPhone maker when comparing consecutive quarters.